“Money should follow the student.”
If you are at all interested in school choice programs you are likely familiar with the above phrase. In the perfect theoretical world, here is how school choice works:
- A parent decides what school is best for their child.
- The school receives a per-pupil payment by enrolling that child.
- The child’s former school loses an equal amount of per-pupil funding because that child left.
- The education system gets better because students, and funding, gravitate toward high-performing schools. Low-preforming schools either improve, or lose their students and funding.
Over two decades of school choice in Milwaukee has proved this four-step process is purely theoretical. For one, the mere act of choosing does not guarantee improved outcomes. There are issues of quality school supply, information availability, the reasons parents make (or do not make) choices, restrictions on who can choose, and structural differences between options. But those topics are for another day. Today, I am going to look at the extent to which money actually does follow the student in Milwaukee’s K-12 education system.
State and local funding of the Milwaukee Public Schools (MPS) is largely determined by enrollment, with a significant caveat. Membership, which is the number that determines how much state and local revenue public school districts receive, is a three-year enrollment average. Meaning, when a student leaves MPS for choice or charter the district still receives (diminishing) funding for that child for two more years. So yes, MPS feels pain when a student leaves, but that pain is eased onto the district. It is also important that when MPS receives a new student the opposite occurs; the district does not receive the full benefit for two years.
Both independent charter schools and schools in the Milwaukee Parental Choice Program (MPCP) receive payments based on their actual enrollment in any given year. Meaning, the pain and benefit of gaining and losing students is felt immediately. Arguably, money does the follow the child in these two types of schools. However the amount that comes per-pupil to independent charter and MPCP schools is less, $7,775 and $6,442 respectively, than what MPS gets per-member from state-aid and the local property tax under revenue limits (just under $10,000).
Complicating matters further, the funding for the MPCP, independent charter, and MPS comes from different places. It is a little over simplified, but funding for the MPCP and independent charters generally comes from outside the school aid formula (MPCP through the MPS levy and the state general fund, and independent charter through the MPS levy and the levies of every school district in Wisconsin), while funding for MPS flows through the school aid formula. This matters because every time a student leaves MPS they not only lose, eventually, the funding for the pupil, but also the ability to count the pupil for purposes of school aids. This reduces the share of MPS’ total revenue that comes from state aid. I probably lost you by now, but all this means is MPS has reasons beyond losing the total revenue generated by a pupil for trying to increase enrollment.
Back to the question at hand, does money follow the student in Milwaukee? The answer is somewhat, but probably not in the way reformers envisioned. A few changes could take Milwaukee closer to that vision.
First is either getting rid of three-year enrollment averages, or calculating enrollment in choice and independent charters based off of three year rolling averages. This would be a difficult step to take because MPS, a district with declining enrollment, would be hurt by the elimination of three-year enrollment averages. Charter and MPCP schools that are growing would be similarly hurt by a move to three-year enrollment averages.
Second is equalizing the state and local revenue per-pupil in all three types of schools. This step would be expensive and would require more General Purpose Revenue to pay for increased MPCP payments, and higher tax levies across the state to pay for higher charter payments.
The most logical change would be to fund all Milwaukee students through the school aid-formula. All Milwaukee pupils would then be treated equally for purposes of state aid and revenue limits. Meaning, all publicly funded pupils in the city would bring the same amount of funding to a school, and all school types would be funded under the same set of rules. Actually accomplishing this idea would require a significant investment in Milwaukee from outstate. Unfortunately, recent and not-so-recent history suggests this is unlikely to happen.
Mike, when PPF researched the legislative history of MPCP, we found direct evidence that the legislature did not want the dollars to truly follow the child. When they created the MPCP, they also increased the total K-12 appropriation to accommodate the new program. The rhetoric may have been that the dollars follow the child, but the policy never was.
The reason, which the legislature well understood, is that the aid lost cannot be fully recouped in cost savings on a per-pupil basis due to the high fixed costs of providing education.
Comment by Anneliese — October 29, 2012 @ 2:16 pm
Anneliese,
That does not surprise me. The ways in which non-traditional publicly-funded options are funded seem to be more often than not dictated by printout politics, not logic.
And good point about the fixed costs, its an important issue in places with as much choice as Milwaukee and it rarely gets much attention.
Comment by Mike Ford — October 29, 2012 @ 3:11 pm
If it took a compromise, like a 3-year “fade-out” of per pupil funds, to allow more choice and keep the district apologists from barring the schoolhouse doors against student departures, then it was probably worth it. Everywhere, we hear that charters and vouchers are “taking” money from public schools, with no acknowledgment that schools with high fixed costs, over time, will have to shrink their overhead if they cannot maintain their enrollment. (In my own district in CA, which has shrunk from over 33,000 students down to almost 30,000 in the last decade, the district has had to do that. Yet, whenever a charter is proposed, the district maintains that it is impossible to operate with a smaller enrollment, even though, over the years, without ever approving a charter, they have still had to do precisely that.)
Comment by Jim — October 30, 2012 @ 12:14 am